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Section 1: 8-K

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): March 30, 2020 (March 30, 2020)

 

THE PECK COMPANY HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   001-37707   47-2150172
(State or other jurisdiction of
incorporation or organization)
  (Commission
File Number)
  (I.R.S. Employer
Identification Number)

 

4050 Williston Road, #511

South Burlington, Vermont

  05403
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (802) 658-3378

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, $0.0001 par value per share   PECK   Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company [X]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

 

 

 
 

 

Item 2.02 Results of Operations and Financial Condition.

 

On March 30, 2020, The Peck Company Holdings, Inc. (the “Company”) issued a press release announcing its financial and operational results for the year ended December 31, 2019 (the “Press Release”). A copy of the Press Release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

In accordance with General Instruction B.2 of Form 8-K, the information in this Form 8-K (including Exhibit 99.1) is being “furnished,” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Forward-Looking Statements

 

Exhibit 99.1 contains, and may implicate, forward-looking statements regarding the Company, and includes cautionary statements identifying important factors that could cause actual results to differ materially from those anticipated.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

99.1 Press Release of The Peck Company Holdings, Inc., dated March 30, 2020.

 

 
 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: March 31, 2020

 

  The Peck Company Holdings, Inc.
     
  By: /s/ Jeffrey Peck
  Name: Jeffrey Peck
  Title: Chief Executive Officer

 

 
 

 

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Section 2: EX-99.1

 

Exhibit 99.1 

 

The Peck Company Holdings, Inc. Reports 2019 Results

 

Revenue Growth of 77% to $28.2 Million

Operating Income of $1.0 Million

Net Loss of $.4 Million

Adjusted EBITDA of $1.9 Million

Adjusted EPS of $0.42

 

SOUTH BURLINGTON, VT – Business Wire - March 30, 2020 – The Peck Company Holdings, Inc. (NASDAQ: PECK) (the “Company” or “Peck”), a leading commercial solar engineering, procurement and construction (EPC) company, today announced the Company’s financial results for the fourth quarter (“Q4 2019”) and year ended December 31, 2019.

 

Key Financial Highlights for Calendar (Full Year) 2019

 

  Revenues increased 77% to $28.2 million, compared to $15.9 million in 2018
  Gross profit increased 33% to $4.2 million, compared to $3.1 million in 2018
  Operating income decreased 17% to $1.0 million, compared to $1.2 million in 2018; primarily due to the cost associated with being a public company
  Adjusted EBITDA increased by 12% to $1.9 million, compared to $1.7 million in 2018
  $30 Million in backlog, projects currently under contract and anticipated contracts to-date

 

Key Business Highlights for Calendar (Full Year) 2019

 

  Commenced additional growth strategy of acquiring solar arrays to resell or operate with recurring revenue
  Awarded 95% of the projects it has reviewed for construction
  Completed 25 projects totaling more than 35 Megawatts (MWs)
  Executed $17 million agreement for 7 MWs with a customer who has a backlog of several hundred million dollars in new solar projects
  Appointed renewable energy expert Daniel Dus to Board of Directors
  Named to Solar Power World’s top solar contractors list
  Completed business combination with Jensyn Acquisition Corp. in becoming a publicly-traded company on the NASDAQ

 

Management Commentary

 

The Peck Company Holdings Chief Executive Officer, Jeffrey Peck, commented, “2019 was a tremendous year for our business as demonstrated by our strong 77% revenue growth and continued operating profitability. It was also a transformational year for our company, as we became publicly-traded with a NASDAQ listing. Our desire to be public was driven by improved access to capital to grow our business and the potential ability to utilize our stock as a currency for acquisitions. After installing more than 125 MWs of solar energy since 2012, we believe that we are well-positioned for what we believe to be the coming revolution to an all renewable energy economy. We recognize that the coronavirus pandemic has disrupted the global economy and created unpredented uncertainty. While as of yet we have not had any projects or contracts cancelled due to the global pandemic, cancellations are certainly a possibility. Regardles, we do believe some are likely to have their timing pushed out, due to the wide-ranging impact of the pandemic. . Subject to the unknown impacts of the pandemic, we do remain cautiously optimistic for 2020 and beyond, with our multi-pronged growth strategy of (1) organic growth by leveraging existing relationships to expand across the Northeast; (2) accretive M&A of profitable businesses to expand geographic footprint, capabilities, and cash flow; and (3) acquisition of solar arrays to construct and resell at a profit or to hold for recurring revenue. Additionally for 2020, we will be raising our visibility within the investment community by strengthening our relationships and increasing awareness with the goal of ultimately enhancing shareholder value.”

 

 
 

 

2020 Outlook

 

The sum of Peck’s backlog, projects currently under contract, and anticipated contracts to date are already near $30 million. Peck is not typically bidding competitively for projects, but instead engages with its customers over a long-term basis to develop project designs and to help customers reduce project costs. Historically, Peck has been awarded over 95% of the project it has reviewed for construction. The upfront assistance and coordination with its clients can be considered Peck’s marketing effort, which is a significant advantage for converting a high percentage of our pipeline projects.

 

In addition, Peck is engaging existing customers and new partners outside of Vermont as part of its planned 2020 expansion across the Northeast. Peck has already identified over $20 million of potential opportunities in other states.

 

Financial Results for the Year Ended December 31, 2019

 

Revenue for the year ended December 31, 2019 was $28.2 million, an increase of $12.3 million, or 77%, compared to $15.9 million for the year ended December 31, 2018. The increase in revenue was primarily due to an increase in the number of projects and MWs completed. Approximately 77% of revenue in the year ended December 31, 2019 was from solar installations, compared to 62% of revenues in the year ended December 31, 2018.

 

Gross profit for the year ended December 31, 2019 was $4.2 million, an increase of $1.0 million, or 33%, compared to $3.1 million for the year ended December 31, 2018. The resulting gross margin was 14.8% for the year ended December 31, 2019, compared to 19.8% for the year ended December 31, 2018. Gross margins for the year ended December 31, 2019 were lower as a result of acquiring projects directly from our development partners at the notice to proceed phase. This strategy results in an increase in revenue and gross profit but does deteriorate the gross margin. The Company will continue to deploy this strategy to gain control of projects at an earlier stage and increase the predictability of its revenue stream.

 

General and administrative expenses for the year ended December 31, 2019 were $2.3 million, an increase of $1.1 million, or 89%, compared to $1.2 million for the year ended December 31, 2018. The increase in general and administration expenses were primarily due to the cost associated with being a public company, as the expenses for accounting, legal and professional services increased significantly in the year ended December 31, 2019 compared to the year ended December 31, 2018.

 

 
 

 

Operating income for the year ended December 31, 2019 was $1.0 million, a decrease of $0.2 million, or 17%, compared to $1.2 million for the year ended December 31, 2018. The decrease in operating income was primarily due to the cost associated with being a public company, as the expenses for accounting, legal and professional services increased significantly in the year ended December 31, 2019 compared to the year ended December 31, 2018.

 

Depreciation expenses for the year ended December 31, 2019 were $0.6 million, an increase of $0.1 million, or 16%, compared to $0.5 million for the year ended December 31, 2018. Depreciation expenses increased primarily due to the purchase of additional equipment for the construction of Peck’s solar array assets.

 

Interest expense for the year ended December 31, 2019 was $0.3 million, an increase of $0.2 million, or 132%, compared to $0.1 million for the year ended December 31, 2018. Interest exepnses increased primarily due to increased utilization of Peck’s line of credit.

 

Net loss for the year ended December 31, 2019 was $0.4 million, compared to a net income of $1.1 million for the year ended December 31, 2018. The net loss for the year ended December 31, 2019 was primarily due to a $1.1 million provision for income taxes, compared to nil for the year ended December 31, 2018.

 

Pro-forma net income, excluding such a provision for income taxes but taking into effect a normalized tax rate, for the year ended December 31, 2019 was $0.5 million, compared to a net income of $0.8 million for the year ended December 31, 2018. The resulting pro-forma earnings per share (EPS) for the year ended December 31, 2019 was $0.11 per diluted share, compared to $0.33 per diluted share (EPS) for the year ended December 31, 2018.

 

Adjusted EBITDA for the year ended December 31, 2019 was $1.9 million, an increase of $0.2 million, or 12%, compared to $1.7 million for the year ended December 31, 2018.

 

Adjusted EPS for the year ended December 31, 2019 was $0.42, compared to $0.52 for the year ended December 31, 2018.

 

 
 

 

The reconciliations of EBITDA, Adjusted EBITDA to net (loss) income, the most directly comparable financial measure calculated and presented in accordance with GAAP, are shown in the table below:

 

   Year ended
December 31,
 
   2019   2018 
Net income (loss)  $(427,759)  $1,056,222 
Depreciation and amortization   621,234    537,484 
Interest expense   313,068    134,810 
Income Tax   1,104,840    250 
EBITDA   1,611,383    1,728,766 
Other costs   273,819    0 
           
Adjusted EBITDA   1,885,202    1,676,989 
           
Weighted Average shares outstanding   4,447,681    3,234,501 
           
Adjusted EPS   0.42    0.52 

 

Conference Call Information

 

Fourth Quarter and Year End 2019 Earnings Results Conference Call

Date: Monday, March 30, 2020

Time: 4:30 PM ET

Dial-in: 1-877-407-3974 (Domestic)

1-201-689-8040 (International)

 

Webcast: https://www.webcaster4.com/Webcast/Page/2298/33820

For those unable to participate during the live broadcast, a replay of the call will also be available from 7:30 p.m. Eastern Time on March 30, 2020 through 11:59 p.m. Eastern Time on April 13, 2020 by dialing 1-877-481-4010 (domestic) and 1-919-882-2331 (international) and referencing the replay pin number: 33820.

 

Certain Non-GAAP Measures

 

We periodically review the following key non-GAAP measures to evaluate our business and trends, measure our performance, prepare financial projections and make strategic decisions.

 

EBITDA, Adjusted EBITDA and Earnout Adjusted EBITDA

 

Included in this presentation are discussions and reconciliations of earnings before interest, income tax and depreciation and amortization (“EBITDA”) and EBITDA adjusted for certain non-cash, non-recurring or non-core expenses (“Adjusted EBITDA”) to net income in accordance with GAAP. Adjusted EBITDA excludes certain non-cash and other expenses, certain legal services costs, professional and consulting fees and expenses, and one-time business combination expenses and certain adjustments. We believe that these non-GAAP measures illustrate the underlying financial and business trends relating to our results of operations and comparability between current and prior periods. We also use these non-GAAP measures to establish and monitor operational goals.

 

 
 

 

These non-GAAP measures are not in accordance with, or an alternative to, GAAP and should be considered in addition to, and not as a substitute or superior to, the other measures of financial performance prepared in accordance with GAAP. Using only the non-GAAP financial measures, particularly Adjusted EBITDA, to analyze our performance would have material limitations because such calculations are based on a subjective determination regarding the nature and classification of events and circumstances that investors may find significant. We compensate for these limitations by presenting both the GAAP and non-GAAP measures of our operating results. Although other companies may report measures entitled “Adjusted EBITDA” or similar in nature, numerous methods may exist for calculating a company’s Adjusted EBITDA or similar measures. As a result, the methods that we use to calculate Adjusted EBITDA may differ from the methods used by other companies to calculate their non-GAAP measures.

 

About The Peck Company Holdings, Inc.

 

Headquartered in South Burlington, VT, The Peck Company Holdings, Inc. is a 2nd-generation family business founded in 1972 and rooted in values that align people, purpose, and profitability. Ranked by Solar Power World as one of the leading commercial solar contractors in the Northeastern United States, the Company provides EPC services to solar energy customers for projects ranging in size from several kilowatts for residential properties to multi-megawatt systems for large commercial and utility scale projects. The Company has installed over 125 megawatts worth of solar systems since it started installing solar in 2012 and continues its focus on profitable growth opportunities. Please visit www.peckcompany.com for additional information.

 

Forward Looking Statements

 

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words or phrases such as “may,” “should,” “expects,” “could,” “intends,” “plans,” “anticipates,” “estimates,” “believes,” “forecasts,” “predicts” or other similar expressions are intended to identify forward-looking statements, which include, without limitation, earnings forecasts, effective tax rate, statements relating to our business strategy and statements of expectations, beliefs, future plans and strategies and anticipated developments concerning our industry, business, operations and financial performance and condition.

 

The forward-looking statements included in this press release are based on our current expectations, projections, estimates and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is forecast in such forward-looking statements, and include, without limitation, the risk factors described from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K.

 

All forward-looking statements included in this press release are based on information currently available to us, and we assume no obligation to update any forward-looking statement except as may be required by law.

 

Contact:

Michael d’Amato

[email protected]

p802-264-2040

 

 
 

 

The Peck Company Holdings, Inc.

Consolidated Balance Sheets

December 31, 2019 and 2018

 

   2019   2018 
Assets          
Current Assets:          
Cash  $95,930   $313,217 
Accounts receivable, net of allowance   7,363,605    2,054,413 
Costs and estimated earnings in excess of billings   1,272,372    718,984 
Due from stockholders   0    2,858 
Other current assets   201,326    0 
Total current assets   8,933,233    3,089,472 
           
Property and equipment:          
Building and improvements   672,727    666,157 
Vehicles   1,283,364    1,147,371 
Tools and equipment   517,602    493,760 
Solar arrays   6,386,025    6,386,025 
    8,859,718    8,693,313 
Less accumulated depreciation   (2,193,007)   (1,571,774)
    6,666,711    7,121,539 
Other Assets:          
Captive insurance investment   140,875    80,823 
Due from stockholders   0    250,000 
Deferred finance charges   365,035    0 
Cash surrender value – life insurance   0    224,530 
    505,910    555,353 
Total assets  $16,105,854   $10,766,364 
           
Liabilities and Stockholders’ Equity          
           
Current Liabilities:          
Accounts payable  $3,949,458   $1,495,785 
Accrued expenses   119,211    236,460 
           
Billings in excess of costs and estimated earnings on uncompleted contracts   126,026    180,627 
Accrued losses on contract in progress   0    9,128 
Due to stockholders   342,718    33,463 
Line of credit   3,510,100    972,524 
Current portion of deferred compensation   27,880    27,068 
Current portion of long-term debt   426,254    410,686 
Total current liabilities   8,501,647    3,365,730 
           
Long-term liabilities:          
Deferred compensation, net of current portion   88,883    116,711 
Deferred tax liability   1,098,481    0 
Long-term debt, net of current portion   1,986,050    2,212,885 
Total liabilities   3,173,414    2,329,596 
           
Stockholders’ equity:          
Preferred stock – 0.0001 par value 1,000,000 shares authorized, 0 issued and outstanding   0    0 
Common stock – 0.0001 par value 49,000,000 shares authorized, 5,298,159 and 3,234,501 issued and outstanding as of December 31, 2019 and 2018 , respectively   529    323 
Additional paid-in capital   826,388    552,630 
Retained earnings   3,603,876    4,518,085 
Total Stockholders’ equity   4,430,793    5,071,038 
Total liabilities and stockholders’ equity  $16,105,854   $10,766,364 

 

 
 

 

The Peck Company Holdings, Inc.

Consolidated Statements of Operations

For the Years Ended December 31, 2019 and 2018

 

       (reclassified) 
   2019   2018 
Earned revenue  $28,221,569   $15,956,097 
Cost of earned revenue   24,050,197    12,806,767 
Gross profit   4,171,372    3,149,330 
           
Warehouse and other operating expenses   864,359    732,196 
General and administrative expenses   2,316,900    1,226,102 
Total operating expenses   3,181,259    1,958,298 
Operating income   990,113    1,191,032 
           
Other income (expenses)          
Interest expense   (313,068)   (134,810)
Total other income (expenses)   (313,068)   (134,810)
           
Income before income taxes   677,045    1,056,222 
Provision for income taxes   1,104,840    250 
           
Net (loss) income  $(427,795)  $1,055,972 
           
Pro forma information          
Net (loss) income  $677,045   $1,056,222 
Income tax expense   187,677    292,785 
   $489,368   $763,437 
Net (loss) income per share          
Weighted average shares outstanding          
Basic   4,447,681    3,234,501 
Diluted   4,447,681    3,234,501 
           
Basic  $(0.10)  $0.33 
Diluted  $(0.10)  $0.33 

 

 
 

 

The Peck Company Holdings, Inc.

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2019 and 2018

 

   2019   2018 
Cash flows from operating activities          
Net (loss) income  $(427,795)  $1,055,972 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:          
Depreciation   621,234    537,484 
Provision for deferred income taxes   1,098,481    0 
           
Changes in operating assets and liabilities:          
Accounts receivable   (5,309,192)   1,071,945 
Prepaid expenses   (201,326)   0 
Costs and estimated earnings in excess of billings   (553,388)   (314,885)
Accounts payable   2,453,673    (707,687)
Accrued expenses   (117,249)   (87,677)
Billings in excess of costs and estimated earnings on uncompleted contracts   (54,601)   (73,556)
Accrued losses on contract in progress   (9,128)   9,128 
Deferred compensation   (27,005)   143,768 
Net cash (used in ) provided by operating activities   (2,526,296)   1,634,492 
           
Cash flows from investing activities:          
Purchase of solar arrays and equipment   (166,405)   (2,729,089)
Cash surrender value – life insurance   224,530    (83,897)
Investment in captive insurance   (60,052)   (44,823)
Net cash used in investing activities   (1,927)   (2,857,809)
           
Cash flows from financing activities:          
Net borrowings on line of credit   2,561,690    972,524 
Proceeds from long-term debt   136,089    930,395 
Payments of long-term debt   (347,356)   (387,622)
Due to stockholders   309,255    (245,715)
Recapitalization costs paid   (129,100)   0 
Stockholder distributions paid   (219,600)   (493,829)
Net cash provided by financing activities   2,310,936    1,021,468 
Net decrease in cash   (217,287)   (447,564)
Cash, beginning of year   313,217    760,781 
Cash, end of year  $95,930   $313,217 
           
Supplemental disclosure of cash flow information          
           
Cash paid during the year for:          
Interest  $244150   $134,810 
Income taxes   5,859    250 
           
Supplemental schedule of non-cash investing and financing activities:          
Vehicles purchased and financed  $126,793   $189,563 
Accrued S corporation distributions which have not been paid  $266,814      

 

 
 

 

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